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Monetizing Cloud Apps - Phil Wainewright
The document discusses various strategies for monetizing cloud applications including subscription models, freemium examples, and case studies from companies like Mailchimp and Box.net. It outlines how to implement cloud software and the importance of targeting profitable prospects, maintaining simplicity, and offering services rather than just products. The document emphasizes the significance of automation in billing processes and adaptive contract strategies for cloud vendors.
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Similar to Monetizing Cloud Apps - Phil Wainewright
Monetizing Cloud Apps - Phil Wainewright
- 1. Monetizing Cloud ApplicationsPhil Wainewright Software industry analyst, blogger and consultant http://www.zdnet.com/blog/saas
- 2. Cloud in contextHow to implement cloud Monetizing cloud Subscription strategies Taking cloud to market Top tips for cloud monetization Agenda
- 3. What do wemean by cloud? cloud computing
- 4. What do wemean by cloud? cloud computing software as a service social networking mobile web WorldWide Web
- 5. What do wemean by cloud? Software (SaaS) Platforms (PaaS) Infrastructure (IaaS)
- 6. What do wemean by cloud? IaaS: you host your app on the cloud Applications Objects Runtime Middleware Database O/S Virtualization Servers Networking
- 7. What do wemean by cloud? PaaS: you build your app on the cloud Applications Objects Runtime Middleware Database O/S Virtualization Servers Networking
- 8. What do wemean by cloud? SaaS: you get your app from the cloud Applications Objects Runtime Middleware Database O/S Virtualization Servers Networking
- 9. What’s driving cloudadoption?
- 10. What’s driving cloudadoption?
- 11. What’s driving cloudadoption?
- 12. What’s driving cloudadoption?
- 13. How to implementcloud Software
- 14. How to implementcloud Software Virtualization
- 15. How to implementcloud Software Virtualization Automated ops
- 16. How to implementcloud Software Virtualization Automated ops
- 17. How to implementcloud Software Virtualization Automated ops Multi-tenancy
- 18. How to implementcloud
- 19. How to implementcloud
- 20. How to implementcloud Software Virtualization Automated ops Multi-tenancy Cloud scale
- 21. How to implementcloud Software Software (SaaS) Platforms (PaaS) Infrastructure (IaaS)
- 22.
- 23. Cloud transition strategiesPrivate
- 24. Cloud transition strategiesPrivate Public SaaS PaaS IaaS
- 25.
- 26. Cloud monetization strategiesSubscription
- 27. Cloud monetization strategiesAdvertising Subscription
- 28. Cloud monetization strategiesTransaction fees Advertising Subscription
- 29. Cloud monetization strategiesDigital goods Transaction fees Advertising Subscription
- 30. Cloud monetization strategiesAggregated data Digital goods Transaction fees Advertising Subscription
- 31. Cloud monetization strategiesAggregated data Digital goods Transaction fees Advertising Subscription $
- 32.
- 33. Case study: MailchimpSep 2010, one year after introducing freemium We are adding over 30,000 new users and 4,000 new paying customers each month. Since starting freemium the number of paying customers has increased over 150% and profit has increased over 650%. Our profit has increased mainly because our cost of acquisition has been dropping. It decreased 8% in just the last quarter to under $100 For every one paying customer, you’ll have ten free users “ we’ve been laser-focused on the ‘1’ side of that 10:1 ratio. We’d never consider freemium until our ‘1’ was big enough.” Source http://blog.mailchimp.com/going-freemium-one-year-later/
- 34. How much doesfree cost? Mass markets demand massive scale Pare down overheads: Development Sales and marketing Operations Support Performance, resilience and DR Watch out for application overheads and extras Beware of mismatched customer profiles
- 35. How much doesit cost to charge? Sales and marketing costs Meeting service level expectations Customer administration costs Measure usage Bill for it Collect payments Manage disputes Monitor and report on service compliance
- 36. Case study: Box.netManual processing failed to handle rising ‘000s of online customers Increasing rate of failed recurring monthly payments Difficult to access customer billling history Resource-intensive to manually re-bill missed payments Automation significantly improved cash collection “ We were literally losing money because we couldn’t track down failed monthly payments.” – Aaron Levie, CEO Source Box.net
- 37. Case study: LargeCRM vendor Reliance on manual contract processes Adding extra seats is a pain Upselling during the contract term is discouraged Downsizing or downgrading waits till renewal Restricted scope for add-ons High churn rates; focus on momentum growth Source Various
- 38. Subscription strategies PriceVolume Price
- 39. Subscription strategies Volumebased Per seat By company size Usage based Pay-as-you-go Prepay with top-up
- 40. Subscription strategies Volumebased Per seat By company size Usage based Pay-as-you-go Prepay with top-up ‘ Pay monthly’ plus: Overage Upsell Top-up ‘ ringtones’
- 41. Case study: Intuit‘ Connected services’ account for 60% of revenues (and growing) Of which $1+bn SaaS, $2+bn total TurboTax Online (2/3s of TurboTax total) Payroll, Merchant Service, QB Online Intuit Partner Platform Founded on QuickBase infrastructure Partnerships with MS Azure, Salesforce.com Leverages installed base and partner ecosystem Source CTO Tayloe Stansbury, conference presentation, and Procullux research
- 42. Case study: BlackSpiderMulti-year contracts helped finance business Sales team incentivized to sell two- and three-year contracts Reduced commission for contracts <1 year Customers like budget certainty Requires a pragmatic approach Works best with strategic infrastructure Less effective when money is tight Contracts should remain flexible Source Former principal
- 43. Taking cloud tomarket
- 44. Trusted advisor roleTrusted advisor
- 45. Trusted advisor roleStrategic guidance Trusted advisor
- 46. Trusted advisor roleSourcing Strategic guidance Trusted advisor
- 47. Trusted advisor roleConfig & delivery Sourcing Strategic guidance Trusted advisor
- 48. Trusted advisor roleIntegration Config & delivery Sourcing Strategic guidance Trusted advisor
- 49. Trusted advisor roleExtensions Integration Config & delivery Sourcing Strategic guidance Trusted advisor
- 50. Trusted advisor roleExtensions Integration Config & delivery Sourcing Strategic guidance Trusted advisor
- 51. 5 top tipsfor cloud monetization Target your most profitable prospects
- 52. 5 top tipsfor cloud monetization Target your most profitable prospects Remember, it’s a service, not a toolkit
- 53. 5 top tipsfor cloud monetization Target your most profitable prospects Remember, it’s a service, not a toolkit Keep it simple – match proposition to value
- 54. 5 top tipsfor cloud monetization Target your most profitable prospects Remember, it’s a service, not a toolkit Keep it simple – match proposition to value Deliver – and price – like a service provider
- 55. 5 top tipsfor cloud monetization Target your most profitable prospects Remember, it’s a service, not a toolkit Keep it simple – match proposition to value Deliver – and price – like a service provider Collect the cash
- 56.
Editor's Notes
- #4 It’s more than just cloud computing
- #5 The social dimension reminds us that it’s all about enabling people to interact and collaborate more effectively.
- #10 Lower cost, faster time to live
- #11 Everything moving the Web – the need to stay competitive
- #12 Keeping pace with technology change
- #13 The need to become more responsive and flexible
- #14 It’s not just a relocation exercise. To exploit all the potential of the bigger picture, I’ve discussed, software has to change when it moves into the cloud environment.
- #17 Virtualization and automation are both good and provide benefits, but they’re not the whole story. A collection of single instances on a cloud is still a wasteful, hard-to-maintain edifice.
- #18 Multi-tenancy is a vital ingredient
- #21 Cloud readiness equally important (nb emphasize business angle, recall connected world context)
- #22 Different layers of cloud. Putting software onto cloud infrastructure (eg on Amazon) isn’t enough on its own to deliver cloud scale unless you rearchitect for multi-tenancy. {NB multi-tenancy removes costs, emphasize the business benefits)
- #27 Subscription Widely used, familiar model Can be complex to administer Variable resource usage makes it difficult to predict costs when starting up Advertising Can help fund freemium and viral marketing but doesn’t play well in the business market Transaction fees Often overlooked, highly proven model Works great for Google, PayPal, Groupon Digital goods (and services) Any virtual content, function or service you sell within your own online service Aggregated data Confidentiality issues in the business market More of a value-add than a money-maker
- #28 Subscription Widely used, familiar model Can be complex to administer Variable resource usage makes it difficult to predict costs when starting up Advertising Can help fund freemium and viral marketing but doesn’t play well in the business market Transaction fees Often overlooked, highly proven model Works great for Google, PayPal, Groupon Digital goods (and services) Any virtual content, function or service you sell within your own online service Aggregated data Confidentiality issues in the business market More of a value-add than a money-maker
- #29 Subscription Widely used, familiar model Can be complex to administer Variable resource usage makes it difficult to predict costs when starting up Advertising Can help fund freemium and viral marketing but doesn’t play well in the business market Transaction fees Often overlooked, highly proven model Works great for Google, PayPal, Groupon Digital goods (and services) Any virtual content, function or service you sell within your own online service Aggregated data Confidentiality issues in the business market More of a value-add than a money-maker
- #30 Subscription Widely used, familiar model Can be complex to administer Variable resource usage makes it difficult to predict costs when starting up Advertising Can help fund freemium and viral marketing but doesn’t play well in the business market Transaction fees Often overlooked, highly proven model Works great for Google, PayPal, Groupon Digital goods (and services) Any virtual content, function or service you sell within your own online service Aggregated data Confidentiality issues in the business market More of a value-add than a money-maker
- #31 Subscription Widely used, familiar model Can be complex to administer Variable resource usage makes it difficult to predict costs when starting up Advertising Can help fund freemium and viral marketing but doesn’t play well in the business market Transaction fees Often overlooked, highly proven model Works great for Google, PayPal, Groupon Digital goods (and services) Any virtual content, function or service you sell within your own online service Aggregated data Confidentiality issues in the business market More of a value-add than a money-maker
- #32 Subscription Widely used, familiar model Can be complex to administer Variable resource usage makes it difficult to predict costs when starting up Advertising Can help fund freemium and viral marketing but doesn’t play well in the business market Transaction fees Often overlooked, highly proven model Works great for Google, PayPal, Groupon Digital goods (and services) Any virtual content, function or service you sell within your own online service Aggregated data Confidentiality issues in the business market More of a value-add than a money-maker
- #35 Intensive use costs more than occasional Storage, emails, heavy transactions and frequent API calls all add to costs
- #50 I’ve singled out the most notable. A lot of what you do is business as usual of course – planning, scoping, project management, etc.